SCRUBBER SYSTEM MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

Market Challenges And Opportunities

Scrubber System Market Drivers:

• Stringent Emission Regulations: Emission control regulations by international and regional governing bodies are a major driver for the scrubber system market. The International Maritime Organization (IMO) has set limits on sulfur oxides emissions from ships. Emission Control Areas like the North Sea and Baltic Sea have more stringent sulfur emission limits of 0.1% compared to the global limit of 0.5% imposed from 2020. Such regulations have increased demand for scrubbers as they enable ships to continue using heavy fuel oil while meeting emission standards. For instance, the upcoming China Emission Control Area regulation in 2025 is expected to boost scrubber demand. Growing environmental concerns and health impacts of emissions have led regulatory authorities to impose more emission control policies benefitting the scrubber market.

• Cost Benefits over Low Sulfur Fuels: Scrubber systems enable ships to continue using lower cost heavy fuel oil instead of switching to more expensive low sulfur fuels to meet IMO 2020 emission standards. This provides significant fuel cost savings that help recover the capital expenditure on scrubbers. According to DNV GL, the price differential between low and high sulfur fuels is expected to persist in the long term, providing an economic incentive for scrubber adoption. In addition, the payback period is estimated to be less than two years for newbuild scrubber installations. The cost benefits compared to using compliant fuels will continue to drive scrubber demand.

• Proven Emission Reduction Efficiency: Scrubber systems have demonstrated over 95% removal efficiency for sulfur oxides and particulate matter emissions in marine engines. Emission tests by manufacturers have validated their effectiveness in helping ships meet and surpass emission standards set by regulations. Unlike emissions reduction techniques like exhaust gas recirculation that lead to lower fuel efficiency, scrubbers have negligible impact on engine performance. Their capability to effectively reduce emissions while allowing use of lower cost fuels will continue to drive adoption.

• Retrofit Opportunity in Existing Fleet: The existing global fleet offers a substantial retrofit opportunity for scrubber systems, which is an important demand driver. As of 2022, over 5000 ships have retrofitted or committed to retrofit scrubbers to meet IMO 2020 and ECA regulations. Older ships find it more economical to retrofit scrubbers rather than switch to costlier clean fuels. Compared to newbuilds, the payback period is estimated to be even shorter for retrofits. With 90% of current ships set to still operate in 2030, retrofitting scrubbers on existing non-compliant fleet will drive market growth.

Scrubber System Market Opportunities:

• LNG as Future Marine Fuel: Liquefied natural gas (LNG) is expected to gain wider adoption as a clean marine fuel in the coming years. It meets SOx and PM emission standards set by IMO without after-treatment. Scrubbers provide an opportunity for ships using LNG fuel to reduce NOx emissions and meet more stringent regulations. Manufacturers are developing LNG-powered hybrid scrubber systems optimized for both SOx and NOx removal. Such exhaust cleaning systems for emerging LNG-fueled vessels provide significant opportunities for market growth.

• Digitalization and IoT Integration: Digitalization and IoT technologies are transforming the marine industry. Scrubber manufacturers have the opportunity to integrate digital solutions with their systems for predictive maintenance, real-time monitoring, data analytics and more. For instance, combining AI with emissions monitoring systems can optimize soot blowing and water cleaning to improve efficiency. IoT integration also enables fleet-wide monitoring and supports decision making. Advances in automation, machine learning and cloud platforms provide opportunities to enhance scrubber systems.

• Development of Robust Technologies: While early scrubber systems faced issues like corrosion and unreliable components, advancement in materials, coatings and designs provides opportunities to develop more robust, reliable systems. New technologies like streamlined water cleaning, non-clogging atomizers, vibration resistant components, effective SO2 absorption media address previous shortcomings. Hybrid scrubbers that combine dry and wet systems also overcome limitations of single technology scrubbers. Future opportunities exist to leverage new materials like ceramics and improve component life for uncompromised operations in tough marine environments.

• Compliance with Tighter Emission Standards: With regions like the EU and China setting more stringent NOx and PM emission standards for ships, scrubber systems will require enhancements to help ships achieve higher emission reductions. Manufacturers can develop multi-pollutant scrubbers or integrate with PM reduction technologies like electrostatic precipitators to address tighter future emission regulations. Compliance with upcoming 0.1% global sulfur limit in 2025 also provides opportunities for more efficient, hybrid scrubber technologies. These help expand the scrubber market.